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Re: Investments Trade Log

Posted: Mon Jan 22, 2018 10:24 pm
by unemployable
I'm getting an itching to roll into US smallcaps. Specifically, sell VTIAX buy VSMAX. Retirement account so no tax considerations.

VTIAX outperformed VSMAX 21%-16% last year and is ahead a percent or so YTD. Smallcaps historically outperform the broad market for several fundamental reasons (takeover premium, lack of analyst coverage, law of large numbers working against largecaps) and should especially outperform during bull markets (they have less liquidity and higher volatility). But that hasn't happened yet.

Large-caps do tend to outperform towards the END of a bull market, when the rally gets confined to fewer and fewer stocks. But I'm not sure we're there yet. This has been a broad rally, just one where smallcaps have lagged.

Anyone aware of any research relating to the small-cap underperformance? I do wonder whether the indexing craze is partly to blame, as more money would be definition go into the biggest companies.

I don't think the US market keeps going up without smallcaps participating to a greater extent. This is one reason I also favor international over the US, too.

Re: Investments Trade Log

Posted: Wed Jan 24, 2018 9:57 am
by jacob
@bryan - So did you find one to short? Looks like it didn't matter which one today...

Re: Investments Trade Log

Posted: Wed Jan 24, 2018 11:02 am
by Seppia
In one of the typical stupid overreactions, SUEZ Environnement (https://en.wikipedia.org/wiki/Suez_Environnement one of the world largest waste management companies together with Veolia) is falling 15%+ because they forecasted earnings of 1.28 billion euros instead of the consensus 1.31.
I like to take advantage of the market stupid overreactions, so I bought a month and a half worth of salaries @11.89€
Hasn't been this low in 3.5 years

Re: Investments Trade Log

Posted: Wed Jan 24, 2018 5:34 pm
by bryan
@jacob, doh, no. I spent more time making coffee in the last few days than trying to figure it out. Initially didn't consider United or Spirit since I am impressed at how willingly people suffer to save a few bucks and those airlines have great expertise in that game. Then again maybe that means they have the most to lose?

edit: I'm leaning toward Meltdown/Spectre actually being a (medium-term) boon for Intel, AMD, et al. I finally updated my old gaming PC (had an OS patch with a fix for one of the variants) and one of the games I play regularly now runs like dog-dookie. So maybe in six months we will see larger than normal number of CPU upgrades (and there's not really many alternatives to Intel/AMD other than in the ultrabook space).

edit #2: confirmed that the "Meltdown fix" in Windows 10 introduced a 40% performance penalty in the game. https://www.grc.com/inspectre.htm is a tool you can use to toggle (reboot required).

Re: Investments Trade Log

Posted: Wed Jan 24, 2018 5:46 pm
by unemployable
And it continues. SPX flat, RUT down 0.7%. Of course this happens the day after I put in my first all-cap/small-cap exchange.

Re: Investments Trade Log

Posted: Mon Jan 29, 2018 5:25 pm
by jacob
Milestone data point: Savings rate reaches its lowest point since 2005.

https://www.washingtonpost.com/news/won ... e-economy/
https://www.wsj.com/articles/u-s-consum ... 1517233281

Re: Investments Trade Log

Posted: Mon Jan 29, 2018 7:56 pm
by ThisDinosaur
I'm not following the cause and effect relationship between the savings rate and the asset price bubble.
If people are diverting more money to buying products and less toward invested capital, then shouldn't earnings rise and asset prices fall?
Is this a shadow wealth effect because people's retirement accounts and home values are high?

Re: Investments Trade Log

Posted: Mon Jan 29, 2018 9:02 pm
by arcyallen
Seppia wrote:
Mon Jan 22, 2018 7:08 pm
Nobody looking into GE?
I bought a bit at $17.70 average, now at 16.2 or something. They have their earnings in a couple days, I'm rooting for a miss of any sort so it can plunge a bit deeper.
Save for a brief period at the depths of the 2009 crisis, it has never been this low in 20 years.
It seems attractive
I've been watching it but there's not enough foolishness pushing the price down. It looks a bit more fundamental. They have serious problems.

Of the few stocks I do own, half were bought when I thought they were "foolishly cheap". Two examples: When people thought that JPMorgan was going to implode in 2012 (due to a rogue trader if memory serves me right), and DR Horton in 2007. As soon as I see "Housing market may never recover" as a headline, I'm interested in buying!

ps - thanks for turning me onto this. Now I know what "Investment Trade Log" actually is. :D

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 3:04 am
by Seppia
Thanks arcy for the comment
I don't know that much about GE. I tend to follow only the stocks I own, and when a big name drops, sometimes I give it a very quick glance and buy a bit if it peeks my interest.
It then gives me the motivation to keep looking into it.
Basically dipping my toes into the GE water.

The reasons why I wanted to try, in no particular order:
- P/E + price to sales don't look bad, especially compared to the rest of the US market
- people seem to focus on the bad news a lot but they also have a few kickass businesses that are doing great
- I am very underweight USA at this moment, so adding a bit isn't too bad
- it looks like the current CEO isn't willing to lie about the real business status (very different from the two CEOs coming before him)
- it dropped 50% in a year
- I don't see GE folding anyitime soon

as I said, very superficial reasons and I could be spectacularly wrong

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 1:42 pm
by cmonkey
So 3 guys who know nothing about healthcare say they are gonna start a healthcare company, all the while admitting they just might fail....and all bedlam breaks loose. Yes please!

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 4:34 pm
by bryan
Well, it's about time AMZN gets into some new markets! Not many companies with similar strong positions. I'm not really sure why JPM is involved.. BRK makes sense, though. I would buy some AMZN if not for the fact that it's already skyrocketed in the last year. They are on my "buy if market crash" list.

Went short QCOM. Hard to know if it will perform well or not, though. They invest a lot into legal battles and monopolist practices, not so much expanding into new markets or innovating. Mostly I just hate the company :D The claims (sentiment) of US "nationalizing" 5G are generally good for QCOM, in the US, where they are already strong, but would hurt them internationally. I think low cost chips (MediaTek et al) will keep taking market share world-wide and there's a chance a European player could regain market share locally (though in 10m of research, and my industry background, it wasn't clear who that might be after years of consolidations.. maybe STMicro).

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 5:13 pm
by jennypenny
re AMZN: I don't want a company that has access to my health records also trying to sell me something. They'd probably require that Alexa be surgically implanted. Too much cross contamination for my taste.

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 5:38 pm
by jennypenny
If anyone is waiting for a correction before putting more money into the market, how much of a correction will it take to get you back in? For myself, I'm not sure. I feel like my usual rules don't apply in this market. I realize individual stocks will be different but I'm talking about in general for those of us with money stuck in 401K-ish index funds.

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 6:34 pm
by Seppia
Tangent off of JPs last posts:
I would be curious to know how long ago people that did go all-cash did it.
Some people have been calling this market “a bubble” for 7 years now.
Eventually they’ll be right, but how much have they given up in the process?
How much should the market tank for a re-entry to be advantageous vs the simple “buy monthly with your savings and hold”?
I personally can picture many scenarios where I’m cautious (I have built a larger percentage of cash since 2017), but all-cash?
I’d never do that.

Managing money Is a lot about regret minimization, and since I save a large percentage of my income and already have the issue of buying stuff monthly, I have a simple rule: I never sell, except to buy something else.

I can only imagine how excruciating it must have been for someone to sell in 2014 or around there, and watch the market go nowhere but up with zero opportunities to buy cheaper.

One needs to have downside risk, but we must deal with upside risk too

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 6:52 pm
by jennypenny
I sold most of my stock a couple of years ago. I really don't regret it. Sure, I'd love to have those gains. OTOH, I don't 'need' more and downside is a much bigger risk at my age. Losses are twice as hard on a portfolio as gains and I'm running out of time to make them up. I haven't always been risk averse. I rode out '87, '00, and '08. Age changes things though and I decided I'd rather watch this one from the sidelines.

I don't mean that to sound cocky. It's just that I'm at a point where other resources (or the lack of them) are more likely to be my downfall and so are more deserving of my attention.

Re: Investments Trade Log

Posted: Tue Jan 30, 2018 8:15 pm
by sky
I was two thirds vttvx, one third vtxvx. Now one third vttvx, two thirds vtxvx.

Re: Investments Trade Log

Posted: Wed Jan 31, 2018 1:26 am
by bryan
I should have some posts somewhere with the exact times when I a) stopped buying any ETFs in my taxable accounts and b) rolled my 401k to an IRA without buying back into the market. The later was about 6 months ago, the former maybe two years ago? On the whole my portfolio has outperformed the stock market, despite being relatively cash heavy at A and B (thanks Bitcoin!).

My current concern is when to re-balance into the total market, as @jennypenny asks. I'm right at one of my FI numbers, so I'm a bit worried about poor sequence of returns atm. Other than individual stocks, I would perhaps get back into total market ETFs in my IRA once things start looking something like early 2009.. no set percentage. Even then there is a chance I invest in something other than total market ETFs (e.g. home, vans, small business(es)).

(and I guess this discussion is a bit off topic if no trades are happening!! Do we need a "call the top" thread or something?)

Re: Investments Trade Log

Posted: Wed Jan 31, 2018 4:30 am
by Seppia
Thanks JP, it's great to be reminded that there is no "one size fits all".
I was looking at it by MY perspective, but your reasoning makest 100% sense.
It it super important to know ourselves.
Personally, I would not have been able to sit there with 100% cash and watch the market go up a tad more than 50% excluding dividends (that's what it did in the last two years) without feeling the unavoidable urge to go back in.

I can definitely see why when someone already has enough, downside protection trumps any possible additional gain. I had just stupidly failed to put myself in that position.

Re: Investments Trade Log

Posted: Wed Jan 31, 2018 7:51 am
by IlliniDave
jennypenny wrote:
Tue Jan 30, 2018 5:38 pm
If anyone is waiting for a correction before putting more money into the market, how much of a correction will it take to get you back in? For myself, I'm not sure. I feel like my usual rules don't apply in this market. I realize individual stocks will be different but I'm talking about in general for those of us with money stuck in 401K-ish index funds.
Not me. I'm in the mode of positioning myself for cessation of employment and I'm incrementally ratcheting down my equity exposure. I'm not out, and am not headed out. In the future I'll only buy new equities (aside from distribution reinvestments which I can't stop in my 401k) when I get out of balance.

Well,that's not entirely true. If stocks were to drop something extraordinary like 70% or so without any accompanying catastrophe, I might swing for the fence one last time with a little market-timing. But I'll never be all-in again. I may go from 50ish% to 80ish% though if it doesn't seem too horribly reckless.

Re: Investments Trade Log

Posted: Wed Jan 31, 2018 6:44 pm
by jennypenny
@Seppia -- It's cool. I used to be all about the numbers, too. Now I realize that the more I build up my other resources, the less money I need ... so in a sense, my kitty is still increasing if you count it in years, not dollars.

I'm also not totally in cash. I have treasuries and gold and a PIMCO bond fund, and most of my 'fund' cash is in stable value funds because that's the only option. That means I'm still getting a reasonable return. I was never an 'all in' kinda gal anyway. My gambling habit has taught me how to skim profits as I go, and that's served me well.